Buying a townhouse with open permits

The nightmare in getting permits closed is if you can’t get the person who pulled the original permits to close them out and being forced to find an electrician, plumber, or other provider to take over another guys work. The new person has to put their license on the line for [X] year old work….and understandably no one wants to do that. And when the DOB inspects, they will require you to pull everything up to current code. I suggest you try to have the current owner on the hook to close out permits and put a significant amount of money into escrow in case they don’t within a certain time frame – and include curing any new DOB issues that comes up as a result of closing the existing permits. I speak from experience….Good luck.

housepoor

in General Discussion 3 years ago

5

Please log in, in order to post replies!

5 replies

Newest Oldest

ib28 | 3 years ago

string(1) "1"
object(WP_User)#4919 (8) {
  ["data"]=>
  object(stdClass)#4908 (12) {
    ["ID"]=>
    string(6) "189672"
    ["user_login"]=>
    string(4) "ib28"
    ["user_pass"]=>
    string(34) "$P$BQK2Hur2VjIp4Fh3WLnw0lNwRQDpcq1"
    ["user_nicename"]=>
    string(4) "ib28"
    ["user_email"]=>
    string(18) "ibouzali@yahoo.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2024-02-22 16:46:37"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(29) "Iliana Bouzali Iliana Bouzali"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(189672)
  ["caps"]=>
  array(1) {
    ["subscriber"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(10) "subscriber"
  }
  ["allcaps"]=>
  array(3) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

We are looking to buy a townhouse, and discovered it has a number of open permits – some seemingly minor and some less minor (like a 20 year old open electrical permit). All are from the current owner’s time in the house.

Has anyone dealt with this issue? I’ve read all of the old posts I can find, and understand it could be a nightmare to close the permits.

We are wondering whether the seller will usually agree to close the permits prior to closing? Or if this is handled in some other way. Will they try to find an all cash buyer who doesn’t care?

We have two concerns: (1) whether our bank will give a mortgage on the property with open permits, and (2) even if they do, the headache years later when we want to do a reno.

Appreciate any advice!

vemrzhjcsfwirjod | 3 years ago

string(1) "1"
object(WP_User)#4926 (8) {
  ["data"]=>
  object(stdClass)#4925 (12) {
    ["ID"]=>
    string(6) "209565"
    ["user_login"]=>
    string(16) "vemrzhjcsfwirjod"
    ["user_pass"]=>
    string(34) "$P$BAN/Y4c81tEPmc1JPUzcQfngQauVzE."
    ["user_nicename"]=>
    string(16) "vemrzhjcsfwirjod"
    ["user_email"]=>
    string(16) "bono5915@aol.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2024-07-03 14:54:00"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(16) "vemrzhjcsfwirjod"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(209565)
  ["caps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Yes! We bought a place with open permits, and are in the process of closing them. I am definitely not an expediter or architect, but:

These situations vary a lot from house to house, so I’d recommend having an expediter look at the specific property and create a proposal for cleaning everything up (probably a mix of DOB paperwork + relevant contractors to redo or inspect some work).

Sellers closing permits is highly market-dependent; for us it wasn’t really an option with a hot market. Closing permits also has an unclear timeline (because DOB), and lots of buyers and sellers don’t want to deal with that ambiguity. In our case we used the open permits to justify a slight lower offer.

About half of the banks I talked to were fine doing a mortgage as long as the open permits weren’t an Alt-1; that piece didn’t end up being as big an issue as I expected.

As a lot of the posts note, it absolutely can be a nightmare… but it can also be doable. It really depends on your exact permit situation, how much you like the house, patience/$ you have, etc.

ib28 | 3 years ago

string(1) "1"
object(WP_User)#4927 (8) {
  ["data"]=>
  object(stdClass)#4928 (12) {
    ["ID"]=>
    string(6) "189672"
    ["user_login"]=>
    string(4) "ib28"
    ["user_pass"]=>
    string(34) "$P$BQK2Hur2VjIp4Fh3WLnw0lNwRQDpcq1"
    ["user_nicename"]=>
    string(4) "ib28"
    ["user_email"]=>
    string(18) "ibouzali@yahoo.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2024-02-22 16:46:37"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(29) "Iliana Bouzali Iliana Bouzali"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(189672)
  ["caps"]=>
  array(1) {
    ["subscriber"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(10) "subscriber"
  }
  ["allcaps"]=>
  array(3) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Very helpful, thanks! Do you mind sharing which banks were/were not willing to proceed with the mortgage assuming the permits are not Alt-1?

ib28 | 3 years ago

string(1) "1"
object(WP_User)#4919 (8) {
  ["data"]=>
  object(stdClass)#4929 (12) {
    ["ID"]=>
    string(6) "189672"
    ["user_login"]=>
    string(4) "ib28"
    ["user_pass"]=>
    string(34) "$P$BQK2Hur2VjIp4Fh3WLnw0lNwRQDpcq1"
    ["user_nicename"]=>
    string(4) "ib28"
    ["user_email"]=>
    string(18) "ibouzali@yahoo.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2024-02-22 16:46:37"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(29) "Iliana Bouzali Iliana Bouzali"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(189672)
  ["caps"]=>
  array(1) {
    ["subscriber"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(10) "subscriber"
  }
  ["allcaps"]=>
  array(3) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Very helpful, thanks! Do you mind sharing which banks were/were not willing to proceed with the mortgage assuming the permits are not Alt-1?

vemrzhjcsfwirjod | 3 years ago

string(1) "1"
object(WP_User)#4928 (8) {
  ["data"]=>
  object(stdClass)#4926 (12) {
    ["ID"]=>
    string(6) "209565"
    ["user_login"]=>
    string(16) "vemrzhjcsfwirjod"
    ["user_pass"]=>
    string(34) "$P$BAN/Y4c81tEPmc1JPUzcQfngQauVzE."
    ["user_nicename"]=>
    string(16) "vemrzhjcsfwirjod"
    ["user_email"]=>
    string(16) "bono5915@aol.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2024-07-03 14:54:00"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(16) "vemrzhjcsfwirjod"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(209565)
  ["caps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

From what I recall Quicken Loans, Amalgamated, First Horizon, and City National were all fine with open minor permits; Chase and TD Bank were not okay with them.